In 2021, many tech companies, including Facebook, which changed its name to Meta, announced their investments in the Metaverse and the expansion of their business systems. The movement has gone so big that The Washington Post called Metaverse as the next version of the Internet.
But what Metaverse means still varies from person to person, and the definition is far from settled. On the other hand, some people believe that when the Metaverse becomes widespread, “some of our daily lives, consumption behavior, and interests will shift from the real world.”
What is the purpose of the metaverse? How would it spread, and what are the future challenges? Makoto Shimano, the General Manager of the Knowledge Innovation Division at Hakuhodo DY Media Partners and the Executive Manager of the Media Innovation Lab, and Mayumi Morinaga, a Senior Researcher at the Institute of Media Environment, will discuss on Metaverse.
Mentioning of Metaverse by Platformers
It is said that the term “Metaverse” was first used in 1992 in Neal Stephenson’s science fiction novel called Snow Crash and has influenced many venture executives from Silicon Valley.
The Metaverse began to draw attention around July 2021, when platformers started mentioning it in their financial results. It received even more attention around October when Facebook announced its name change to Meta.
Here are some typical comments from those platformers:
- Facebook: Facebook will transition from a social media company to a Metaverse company within a few years.
- Microsoft: We will lead the metaverse as the digital and real worlds converge.
- Roblox: Roblox is the “Good Shepherd” of the Metaverse. (Shepherd = from the Gospel of John, meaning the one who guides people = the god)
- Epic Games: It is an open secret that Epic is investing in building the Metaverse.
Vague Definition of the “Metaverse”
In general, a Metaverse is “a three-dimensional virtual space created on a communication network in which many people can participate and have various purposes and act freely”. However, the definition of the Metaverse is currently ambiguous and is used differently by companies and people.
Japan’s Ministry of Economy, Trade and Industry (METI) is also paying attention to the Metaverse market and has issued a report about it in July 2021. In it, virtual space is defined as “a three-dimensional virtual space constructed on the Internet in which many people can participate and can act freely. The user operates an alter ego, an avatar, to move around and interact with others in the space. Applicable spaces are in-game spaces and virtual event spaces.” The Metaverse is introduced as a place where “services and content in various domains (e.g., gaming, education, health care) are provided from those providers to consumers within a single virtual space (provided by a platformer).”
Source: METI Website
Some say that online games and social virtual reality that already exist realize the Metaverse. However, the Metaverse currently under discussion is not limited to the domain provided by specific platforms or businesses but is considered a world in which they are “interconnected” and “free to come and go”.
For example, before the spread of the Internet, PC communication services allowed users to send and receive e-mail only to those who subscribed to the same service, not across service companies. Even with cell phones, making calls between different mobile carriers was impossible when the service started. It became available when “interconnection” was established in 1991.
Considering those, we can think that the “Metaverse” we currently have is similar to pre-Internet PC communications and pre-interconnection cell phone services. Connecting those individual services beyond the boundaries of companies and services like the e-mails and cell phones we now have may be the “TRUE Metaverse” we expect as the next version of the Internet. There, people can interconnectedly enjoy games and services in the Metaverse provided by different companies with the same ID. It may become possible to buy a skin for your avatar and wear that to play a game provided by another company and use points gained in that game in a different game.
Becoming an Important Channel for Media and Marketing
The values of the Metaverse include “free from geographic and spatial physical constraints,” “extraordinary experiences,” “self-realization that cannot be experienced in real life,” and “affirmation of diverse ways of living and personalities.” For consumers, it will be a comfortable space where they can encounter subjects of interest. Or, it will become a place where people can spread and get information that they want. As people start spending time enjoying goods, services, and entertainment in the Metaverse, it will become a place that every business cannot ignore. We see the situation as follows:
Movies Provide Hints to Better Understand the Metaverse
Japanese and U.S. movies related to the Metaverse were released around the same time, in summer 2021.
The Japanese film “Belle” is about a girl living in a rural part of Japan, joining a virtual reality social networking service, and growing as a person through her experience there. “Free Guy,” an American action-comedy film released at about the same time, is about a character set in the Metaverse as a non-player character. Spielberg’s “Ready Player One,” released in 2018, was also a very thought-provoking film. The story takes place in the 2040s, when people spend most of their time as an avatar in a virtual space called OASIS, escaping from reality. The movie captures the Metaverse space as a place where all dreams can come true by just wearing Goggles.
It also portrayed the virtual space as a miscellaneous world with high-quality CG characters and rough sketched ones co-existing in the same space. It was like how the Metaverse would be if it became part of our life. “Belle” also illustrated the world encompassing both cute and dorky. I think that the Metaverse that will be established in the future will probably go in such a direction.
Second Life in the Metaverse – Metaverse Services Expected by the Consumers
Some may see that the Metaverse has begun to attract attention recently. However, such a concept has existed for some time. A typical example is “Second Life,” a service born in the States in 2003 and became a hot topic in Japan from 2005 to 2007. Many enterprises created their islands, and universities set up campuses there then, but it did not take hold in the general public as much as was hoped. There were four reasons for this:
- The PC and communication performances at that time were poor. People could not feel fully immersed in the world.
- Because the service started before smartphones, it was not easy to enjoy anytime, anywhere.
- The capacity of servers was limited, limiting the number of users enjoying the world simultaneously.
- Expectations of monetization were too high, making it difficult for consumers to accept the atmosphere.
But, the world is different now. With faster phones and communication lines, people are always connected on mobile. With the spread of social networking services and remote services like Zoom, it is already in our lives to connect with people online. People are more used to moving their avatars in the 3D CG world, such as in “Fortnight” and “Animal Crossing – New Horizons”. There are more chances to experience virtual spaces such as Facebook’s “Horizon Workrooms” and “virtual showrooms” of different businesses. We can say that the world can accept the Metaverse more than ever.
The “New Media Behavior Desire Survey” conducted by the Institute of Media Environment shows that consumers’ expectations for “the Metaverse-like virtual spaces” are increasing.
Among the survey items, we see that a decent ratio of people between the age of 10 to 20s is willing to “communicate with people in a virtual space such as in a game in the form of avatar” and “enjoy concerts, plays, and TVs in a virtual space such as in a game”. But 10 to 20% of people aged 40 to 50s are also willing. We can say that expectations and desires for the Metaverse are growing.
Requirements for the Establishment of the TRUE Metaverse
The following three points are considered necessary to establish a TRUE open Metaverse.
- Immersive experience……Feels real, just as in the real world. Easy operation with fast response.
- Community……Can communicate and interact with real people. Build a society where people not only consume and give reviews to things but can provide them.
- Ecosystem……Build an economic system using NFT to prevent fault copies to protect the value of the original and the blockchain technology to prevent misuse.
Achieving the above three points are crucial to create a space where people can interactively communicate with each other and spend their time and money.
But first, we must consider the device to use to enter the Metaverse space. The Institute of Media Environment has conducted research targeting consumers to “experience a virtual space” using the Oculus Quest head-mounted display. The institute measured peoples’ brain waves during the experience, and the results showed that women responded more than men. In the past, there was a time many women started using the Internet when computers with rounded and colorful designs were introduced. This may be the same for the spread of the Metaverse. If lighter devices with different designs and easier controls are introduced, more and more people will enter the world. There is also a challenge for companies to keep providing attractive 3D content just by themselves. Therefore, there should be a framework where users can participate as creators to deliver content. The key is building a quality community with a proper structure for rewarding such creators.
4 Challenges of the Metaverse to Get Widely Spread
I have summarized the challenges of the Metaverse to spread widely based on four perspectives: technology, contents and services, economy, and law.
As the Metaverse becomes more prevalent, consumers will spend more time and money to enjoy the space. It is important to deepen your thoughts on how to develop your business when part of the economy shifts to the Metaverse. Due to trends in tech companies, “Metaverse” has quickly become a buzzword. Many issues still need to be cleared, such as the platform mechanism, the development of devices to fit many people, and rules for proper operation. But with its unlimited possibilities, it is worth keeping your eyes on.
*Media Innovation Lab
An organization structured by Hakuhodo DY Media Partners and the Digital Advertising Consortium for collecting, analyzing, and spreading information to stimulate innovation regarding AdX (Ad transformation). It is based in Japan, Shenzhen, and Silicon Valley. By integrating the strengths of both companies, the Media Innovation Lab will explore new possibilities in the media industry for next-generation business development in the media business and digital domain.
General Manager of the Knowledge Innovation Division at Hakuhodo DY Media Partners
Executive Manager of the Media Innovation Lab
Joined Hakuhodo in 1991. Makoto worked primarily in the marketing department, where he was responsible for business and product development, integrated communication development, and branding work for various beverage, telecommunications, automotive, and service companies. Since 2012, Makoto has been working in data-driven marketing to enhance strategic planning and promotion by integrating marketing and media and promoting digital transformation. He has been a General Manager of the Knowledge Innovation Division at Hakuhodo DY Media Partners since 2020. Co-author, “Comprehensive Lessons in Advertising from the Basics” (Nikkei Advertising Institute)
Senior Researcher of the Institute of Media Environment at Hakuhodo DY Media Partners
Mayumi joins Hakuhodo after forking for a telecommunications company. A behind-the-scenes expert who conceptualizes and constructs the use of digital tools to support creating content and smooth communication. She also makes media appearances and writes on technology, heavy Internet users, and otaku culture. She calls herself “an outgoing nerd overcoming poor communication skills with mental strength”. Director of the WOM Marketing Council. Co-authored: “Are Restaurants Rated Five-stars on a Gourmet Websites That Good?” (Magazine House)
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